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Loveland permit numbers show a resurgent new-home industry

By Tom Hacker Reporter-Herald Staff Writer

Posted:
07/23/2012 11:46:17 PM MDT

Construction subcontractors -- the small businesses that pour concrete, install plumbing and electrical systems, hang drywall and build landscapes at new homes -- have been starving for the past three years.

Busy Builders

A rebound of the region's home building industry shows up in statistics from Loveland's building division, as permits for single-family homes are on pace for a four-fold increase this year over the 2009 number.

YearNumber of permits

2009 63

2010 104

2011 149

2012* 132

*Through June 30

-- City of Loveland

The construction drought that began with the twin housing and banking collapse in the fall of 2008 winnowed their number to a fraction of what it was in the booming mid-2000s.

Not only are they busier in 2012, but the demand for their work is outpacing the ability of their thinning ranks to react to a suddenly surging new-home market.

"Every subcontractor in the area is maxed out," said Jammie Sabin, president

of Windsor-based Aspen Homes Inc. of Colorado, one of Loveland's prime builders.

"We have trouble getting things done on schedule. The trouble is, the market is a whole lot better, but the capacity of the industry is a whole lot less."

Sabin's company, and the remaining home builders in the Northern Colorado market, are enjoying a comparative boom after languishing through the recession's darkest years.

Loveland's building department has issued 132 permits for single-family homes during the first half of this year.

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That is more than twice the number for all of 2009, when builders pulled 63 permits.

Aspen Homes, honored in 2007 as the nation's most energy-efficient new home builder, and Loveland-based Midtown Homes, among the city's forerunners in affordable housing, have both appeared regularly on the city's permit logs even during the deep downturn.

Market Returns

Their staying power is paying off as home buyers, still enjoying some of history's lowest mortgage rates, are becoming more inclined to buy.

"The market under $250,000 has been very strong in the last 12 to18 months," said Eric Holsapple, who splits time between commercial real estate work at Loveland Commercial LLC and Midtown, that company's residential arm that targets a market with prices under $150,000.

"A year ago we didn't have any pre-sales. Today we have 30."

The Home Builders Association of Northern Colorado, the trade group that represents the residential construction industry, has compiled numbers that show the rebound.

The group tracks local government-issued permits in Loveland, Fort Collins, Greeley, Windsor and in rural Larimer and Weld counties.

In that vast region in 2009, it counted 391 single-family home starts. In the first half alone of 2012, the cities and towns showed more than three times that number -- 1,235 permits.

Strong Finish Ahead?

"And, we still have a lot of good building months left this year," said Dottie Weber, the group's executive director. "Personally I think July, August and September are going to be very good."

Sabin said he has seen a sharp and welcome shift in consumer behavior this spring and summer compared to the past three years.

"People are out looking, and they're making decisions," he said. "The number of people who are out there getting serious has about doubled, and they all seem like they have to go 'right now.'"

Sabin and Holsapple both said "spec" homes, those built without buyers backing the projects, are selling out.

"The specs are selling as fast as we can get them up," Sabin said.

The builders, and their trade group, said that the availability of permit-ready lots is the only factor that might slow down their industry's bounce-back.

That's an issue that is more in the hands of bankers than builders, the industry says. Already, the pipeline for new lots is drying up, especially in the region's larger cities.

"Until the financial people who are in the know loosen up on money for financing and acquisition, we're not going to see it change," Weber said. "There just aren't the dollars available."

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